Gold rises on weakening dollar

BENGALURU, Dec 27 (Reuters): Gold rose for an eighth straight session on Wednesday as a retreat in the dollar encouraged some investors to buy into the metal, while this year's leading precious metal palladium hit another near 17-year peak.

Gold prices have risen more than 3.0 per cent over the last two weeks as the dollar, in which the metal is priced, turned lower.

Spot gold was up 0.2 per cent at $1,285.35 an ounce at 1030 GMT, while US gold futures for February delivery were $2.60 an ounce higher at $1,290.10.

"A lack of liquidity and the weakness of the US dollar are bringing more interest into the precious metals," Afshin Nabavi, head of trading at MKS in Switzerland, said. "Not everybody is at their desks, especially last Friday and yesterday."

"We may try to test the waters around $1,300," he said. "There seems to be a bit of physical interest coming from the Chinese side as we approach the (Lunar) New Year in February. I wouldn't be surprised if this buying continues."